BORROWING PASSES $30BN MARK

Home loan borrowing has increased for seven consecutive months, reflecting an increase both in the number of buyers and their average loan size.

Between December 2023 and July 2024, the volume of new monthly home loan commitments (excluding refinancing) rose 17.1%, from $26.126 billion to $30.584 billion, according to the Australian Bureau of Statistics.

If you're planning to apply for a home loan, here are ways you can improve your borrowing power:

Reduce your spending.Look for opportunities to cut your discretionary expenses, so lenders can see you can afford larger mortgage repayments.

Reduce your credit card limit. Even if you repay 100% of your debt each month, lenders know this could change at any time, which would reduce the amount of money you could devote to mortgage repayments. So the lower your credit card limit, the more creditworthy you'll be in the eyes of lenders.

Pay off existing debts.If possible, close out any personal loans and car loans, so you have more disposable income to devote to a mortgage.

Improve your credit score.One way to do this is to order a free copy of your credit report from Illion, Equifax or Experian; look for incorrect negative listings; and apply to remove any that you find.

Visit a broker. Your borrowing capacity can differ significantly from lender to lender – sometimes by more than $100,000. I have a diverse lender panel, which means I can place you with a lender more likely to look favourably on someone with your circumstances.

Have a question?

Contact Amol from Juice Finance on 0435 040 986 or go to www.juicefinance.com.au and click ‘Get Started’ to find out more.